How To Buy Foreclosure Homes - A Real Estate Investment Opportnuity

In the past few months, foreclosure filings against homeowners have risen dramatically. This increase is up to 30-40% in some areas compared to last year. Experts claim that Realtors In Sedona Arizona foreclosures have increased by more than two-thirds in many areas over the past three years. High prices, rising interest rates and mortgages that need to be adjusted have made it difficult for homeowners to manage their finances. This is the result. In the last few years, many mortgage lenders have created new loans to help buyers buy homes. "1.00% MORTGAGES!!" "1.00% MORTGAGES!!" Record numbers of buyers came out. People who could not afford homes were able to get 100% financing at record low interest rates. This helped spur the greatest real estate boom in history. Nearly 62% of all Nevada mortgages are interest only and ARMs. Nevada is where I reside. California is second. Today, however, interest rates are much higher. This is combined with a weak real estate market, and homeowners are now under pressure to make higher adjustable-rate mortgage payments or refinance to reduce their monthly payments. Consider this example: You financed 80% of $300,000. In 2004, you got a 3-year ARM at 5.000% and a margin 2.75%. Your monthly mortgage payment was $1250. Although it was difficult, you knew you could afford it. You could see an adjustment of 8.00% if your loan adjusts in the current year (margin + index). This could increase your monthly payment to $2000. This will make it impossible to afford your home. You can refinance it, but that will only raise your monthly payment by $100-$200 from $1250. What if your life circumstances have changed? Your credit score isn't as good. Although you may have lots of equity, you might not be as financially secure in slower markets. You may have lost all your equity due to a credit card. Your home may have appreciated since the purchase. This is because the real estate market is slower. Homeowners with high-risk mortgages may have the opportunity to take advantage of rising home values by refinancing at lower interest rates in recent years. You can also sell. Refinancing is not an option as housing prices are stabilizing or declining. Selling is not an option due to the high inventory of houses currently on the market, and the 30% decline in sales compared to last year. Rising interest rates and declining home values are a sure sign of disaster. The number of 30-day delinquencies in 2003 was only half the current level. This was during a market frenzied. Experts believe that foreclosures will become more common in the future.